What Is An Accredited Investment Trustee – And How To Become One | Financial advisers


When it comes to demonstrating and maintaining a fiduciary duty, financial professionals who have the Chartered Investment Trustee, or AIF, credentials carry a bit more “oomph”.


This professional designation prepares investment professionals to act as trustees – and to work in the best interests of clients – in the performance of their duties.

Right now, not all investment advisers have training or a fiduciary duty, says Matthew Eickman, head of AIF and national retirement practices at Qualified Plan Advisors. “On the one hand, it’s understandable,” he says. “Fiduciary responsibilities have not traditionally been a large part of securities registration or insurance licensing processes.” But on the other hand, it’s just not good enough.

With the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Department of Labor “more and more emphasis is placed on trustees, it has become extremely important for advisers to have a higher level. higher than the bare minimum, ”says Eickman. “Pursuing and keeping the FIA ​​title is a fundamental step towards raising these standards and better positioning an advisor to better take care of the interests of his clients. “

Here’s what advisors need to understand about Accredited Investment Trustee Certification and how to get it.

What is an Accredited Investment Trustee, or AIF, Certification?

“The AIF designation is awarded to individuals who have met standards of education, competence, conduct and ethics to apply a fiduciary standard of care and serve the best interests of their clients,” said John Faustino, Manager of Fi360 at Broadridge Fi360 Solutions, the organization that issues the AIF designation.

Fi360 is accredited by the American National Standards Institute to provide the AIF designation, which is recognized by FINRA as a certification of the financial sector.

The AIF designation is intended to demonstrate that professionals charged with managing the investments of others or advising on such investments understand and comply with their fiduciary duty. Obtaining your AIF designation shows that you are not just another advisor masquerading as a trustee.

The most critical aspect of an AIF certification is the additional commitment it demonstrates, says Eickman. “It’s best for investors to work with a trustee. They are better off when this trustee takes their job seriously. “

There are four main reasons why someone might want to become an AIF, says Faustino. These reasons are to create better results for investors, to mitigate fiduciary responsibility, to differentiate yourself from other finance professionals and to gain new business, or to join a community of investor-centric finance professionals and sharing the same ideas.

The AIF can complement or build on an existing title such as the Certified Financial Planner title.

What is fiduciary duty?

Fiduciary duty is the highest standard of care in the financial industry. This means that you have the power and responsibility to act for someone else in situations requiring complete trust, good faith and honesty.

Having a fiduciary duty to your clients means that you must act in your client’s best interests at all times, even if it is against your own best interests. A trustee can only recommend an investment option or strategy if it is the best option available. This is different from advisers who work to the suitability standard, which requires that they only make sure that an investment is “suitable” for the investor before recommending it.

To give an example of this distinction: A suitability advisor might recommend an investment that would earn them the highest commission even though there is an alternative that might play the same role in the client’s portfolio but at a lower cost. A trustee would only recommend the cheapest option because it is the best choice for the client.

Trustees should also eliminate all conflicts of interest where possible and disclose those that cannot be eliminated. This means that fiduciary advisors cannot earn commissions on the products they sell, as this would cause them to recommend the highest paying product rather than the one that best suits the client.

What is an AIF used for?

The majority of people appointed by AIF are financial professionals who work for registered investment advisers, or RIAs, companies, brokers or banks, explains Faustino. “Their day-to-day responsibilities generally include supporting clients of wealth, pension plans and foundations or endowments with planning and investment needs using fiduciary practices. “

Becoming an AIF designated does not necessarily mean that you will have additional responsibilities than what you did before obtaining the designation. Rather, the designation shows that you accept responsibility for performing your day-to-day duties under a higher standard of care, Eickman says.

“Ignorance should never be an excuse for investment advisers, let alone an excuse for those appointed by an AIF,” he says. “They know better. They know more. They need to serve their customers with this better understanding in mind.”

How to become a licensed investment trustee

To become an AIF, you must meet predetermined experience and education requirements, complete AIF training, pass the exam, meet the AIF Code of Ethics and Standards of Conduct, and pay fees. contributions required.

You will also need to have a bachelor’s degree or higher, unless you have five years of relevant non-administrative experience in financial services and some other professional designation or at least eight years of relevant non-administrative experience. administrative in financial services without any other title. If you don’t have at least five years of relevant experience, you can still earn the AIF designation as long as you have both your bachelor’s degree and another professional designation.

The training portion of the AIF designation is provided by Fi360 and can be completed in a self-paced online format, a virtual classroom format or the synthesis format. Although the length of time required will vary depending on the format, according to Faustino, applicants should plan to spend 20 to 25 hours completing an AIF training course and reading the “Prudent Practices for Investment Advisors” manual before taking the exam. exam.

The exam is an 80-question multiple-choice test consisting of 70 scored questions and 10 unrated essay questions. Candidates have 120 minutes to complete the test and must achieve a score of 70% to pass.

Aspiring AIFs have one year after passing the AIF exam to meet the other requirements. If you do not meet all of the requirements within one year of taking your test, you will need to retake the exam to earn your certification.

The AIF designation costs $ 325 for the first year membership fees. You will need to pay these dues annually and complete six hours of continuing education, four of which must be delivered by Fi360 or one of Fi360’s approved providers, for your certification to remain active.

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